NAIROBI, Kenya, Nov 5 – The National Assembly’s Tuesday attempt to retain the cap on interest rates flopped after MPs failed to raise the two-thirds majority needed to override President Uhuru Kenyatta’s reservation to this year’s Finance Bill.
Speaker Justin Muturi informed the House that only 161 MPs were present in the Chamber which is below the 233 MPs requirement and directed that an amendment can only be introduced in the House after six months.
The House had during the Committee of the Whole House approved an amendment proposed by the Finance Committee which sought to enhance the President’s reservations so that those already servicing loans or in agreement with lending institutions for loans under the repealed regime, are not affected.
Temporary Deputy Speaker Lakipia West MP Patrick Mariru had a hectic time presiding over the proceeding of the MPs who engaged in chants against the re-introduction of the rates.
Finance Committee Chairman Benjamin Limo (Kipkelion West) had the microphone snatched from his hand as he tried to justify the amendment.
Mariru was forced to preside of the proceedings while on his feet as some MPs became unruly.
Some MPs jeered Majority Leader Aden Duale as they held up white piece of paper with writing calling for the retaining of the interest rate cap instead of leaving Kenyans at the mercy of lenders that have in the past charged exorbitant rates on loans.
President Kenyatta had, in a message to House last month, said that state control on lending rates caused a credit squeeze by the banks pushing individuals and small businesses into the hands of loan sharks who charge steep interest on short-term loans.
The Head of State had refused to assent to the Finance Bill 2019 because MPs had done away with the amendment by the National Treasury that sought to repeal the 2016 Banking (Amendment) Act.
In 2016, the National Assembly imposed caps on commercial lending rates at the four percentage points above the benchment Central Bank Rate to cushion Kenyans against exploitation and loan costs.
